This article analyses the recent establishment of quasi-markets in the field of public health in Costa Rica through the internal separation of the functions of collection of contributions, financing, purchasing and the provision of services in the Costa Rican Social Security Fund; the application of a new financing model; and the introduction of management contracts with hospitals and health areas as a key instrument for allocating and transferring resources as a function of performance and fulfilment of goals. The context and bases of the management reform are examined, and a description is given of both the new financing model and the institutional and organizational implications of the 1997 contracts. These contracts are described in the light of their main thrusts, in which special emphasis is placed on innovations in terms of processes and the development of reliable records of activities, costs and quality, going beyond the mere use of indicators of efficiency and efficacy. The performance of hospitals and health areas in the context of these contracts is described, and finally some views are expressed on the strengths and weaknesses of the relevant institutions and instrument for optimizing resource allocation. Throughout the analysis comparisons are made with the experience of Chile.